Yet in the abbreviated Chapter 11 filing Monday, Jackson's lawyers said that his assets range from $10 million to $50 million, including cash. The same goes for his liabilities.

What could be going on here?

The lawyers for a woman who just won a lawsuit against Jackson believe he's trying to protect himself from paying their client. Lastonia Leviston is due $5 million as a result of a sex tape that Jackson posted in 2009 allegedly as part of an attempt to stir the pot with rival rapper Rick Ross.

Hunter Shkolnik, Leviston's lawyer, told Business Insider, "We think this is a failed attempt to avoid paying this woman who has been hurt so badly by his actions."

Here's the backstory: Ross and Leviston had a child together in 2003. In 2008, Leviston was recorded having sex with her boyfriend at the time (who was not Ross). That boyfriend gave Jackson a copy of that sex tape, according to the AP.

Jackson allegedly posted the tape online to humiliate Ross. But he didn't just post the tape: He added his own commentary while wearing a wig. Jackson called himself "Pimpin' Curly" and recorded a demeaning, vulgar voiceover for the tape, according to The Daily News. (We have not watched the video.)

It ended up humiliating Leviston. The AP, citing news reports, says Leviston testified in court, "This was something done to me. I didn't have a choice. I would never, ever do this to myself."

Three days ago Leviston won a $5 million judgement against Jackson for that tape. She could earn more from punitive damages, the AP says.

So what does this have to do with Jackson's bankruptcy?

One source familiar with the matter speculated that the move Monday is an attempt to wrangle better settlement terms from Leviston. Our source speculated that this could be a way to get Leviston to accept a discounted settlement.

And the source said it is possible that Jackson — if he can prove that he is bankrupt — could reduce damages he owes after he lost lost a $17 million lawsuit in Florida with a headphones manufacturer after a botched business partnership.

The same source pointed out that other attempts similar to Jackson's move have failed celebrities. For example, O.J. Simpson was still held in prison but could not duck legal liabilities to Nicole Brown Simpson's survivors even after his bankruptcy filing.

Isaac Brekken/General Motors via Getty Images If the celebrity committed an intentional act (such as releasing the sex tape) and is responsible for damages, those cannot be discharged through bankruptcy. (That may not extend to the $17 million lawsuit that he lost to the headphones company, however.)

Jackson filed for bankruptcy protection Monday morning in Connecticut, and over the next 30 to 45 days, it is expected that court-ordered sealed documents regarding his finances will come to light.

"This filing for personal bankruptcy permits Mr. Jackson to continue his involvement with various business interests and continue his work as an entertainer, while he pursues an orderly reorganization of his financial affairs," Jackson's attorney, William A. Brewer III, said in a statement. The firm did not provide further comment.

Even if Jackson has assets in excess of his liabilities, it doesn't mean he has enough cash to pay off the sex-tape lawsuit immediately, legal experts say.

The Chapter 11 filing could allow him to buy some time. He will be paying off what he owes in payment installations rather than in one lump sum if the bankruptcy move proves successful in court.

A legal source said that, under Connecticut law, where he filed, Jackson's bankruptcy filing will be treated like a corporation and not an individual.